Cloud-based inventory management solutions provide a high level of visibility that enables distributors to get the most out of their supply chains.
Knowledge is the key to effective inventory management. Distributors must be aware of what products they need to stock and when those products should be available, according to an article on the NetSuite website. Similarly, they should know what’s in the warehouse and where it’s located at any given time. Optimal inventory levels strike a balance between having enough stock to meet demand and not so much that it results in unnecessary capital costs.
Finding the technology solution that’s right for your business starts with an honest assessment of what you need now and what you will need in the future. Determine whether your current inventory management system can scale to accommodate growth and whether it’s flexible enough to handle change.
Most older ERP systems can’t provide the visibility needed for inventory management in today’s environment, much less accommodate future growth and increased complexity in the supply chain. It’s no longer feasible for distributors to remain competitive by relying on gut instincts or reams of spreadsheets. Decisions should be made based on solid data, and spreadsheets are often full of bad or outdated information.
In an overview of its inventory management software on its website, NetSuite highlights the benefits of implementing a cloud-based solution, including the following:
- Access to real-time visibility of supply and demand, costs and fulfillment measures, and trends.
- A clear understanding of inventory costs, turn rates and profitability that allows for effective margin management.
- A streamlined procure-to-pay process that removes manual processes and boosts vendor satisfaction.
- Better relationships with suppliers, vendors and partners with self-service features and access to up-to-date information.
- Improved customer service thanks to the capability of effectively and efficiently meeting demand.
Three key features of NetSuite’s inventory management software that help distributors to leverage the supply chain for all its worth, and their functional enhancements, are detailed below.
- Warehouse and inventory control:
• Keep an eye on operations with visibility into real-time metrics for inventory control and supply chain management, such as the on-time performance rates of suppliers.
• Watch costs drop and efficiency rise with better control of inventory levels.
• Boost margins by setting prices that take into account differences among customers, channels and currencies.
• Take control of inventory replenishment and stock products at levels that can meet expected demand but aren’t excessive.
- Purchasing and vendor management:
• Eliminate paper-based forms and manual processes with online purchase orders. This will help to increase efficiency throughout the business.
• Give vendors visibility into your operations, such as inventory reordering points and data on past transactions. This will streamline requisition processes and lead to better collaboration.
• Develop a thorough business process flow to move seamlessly from purchasing to receiving to accounts payable. This will help to track costs and reduce mistakes.
- Demand planning:
• Use past sales data or forecasts to develop demand plans.
• Create models to see what effect anticipated sales and purchase orders could have on future inventory levels.
• Make supply plans that trigger purchase or work orders automatically.
The goal of inventory management software is to be able to manage the demand of inventory so that you order products in appropriate quantities. Managing inventory is all about knowing what you have on hand, knowing what your customers want and need, and knowing how you can efficiently procure it from your vendors.